Asian thirst fuels Bellamy’s

Bellamy’s Organic, the Tasmanian company that sells infant formula and children’s snacks in Woolworths and Coles posted one of the best-performing initial public offers of the year.

Investors were enamoured by the group’s success in the local market and its exposure to the growing thirst for dairy products across Asia’s emerging middle class.

Bellamy’s managing director Laura McBain is aiming to replicate the brand’s local popularity in China and in other Asian countries.

Since 2010, revenue had grown at an average annual run rate of 55 per cent, hitting $48.2 million in 2014.

Lead broker on the deal was Wilson HTM, with Hugh Robertson from the Melbourne office on the case. He was the broker that acted for Murray Goulburn last year when they lobbed the first bid for The Warrnambool Cheese and Butter Factory, sparking the subsequent cheese war.

Planning for the listing began in early March, with some pre-IPO meetings lined up for late May and early June to sound out interest.

One of Bellamy’s early private shareholders introduced the deal to Singapore-based investment group The Black Prince PVT Foundation. Without meeting management, and with very little other contact, the low-profile group offered to take 15 per cent.

With a cornerstone investor on board things progressed quickly. A four day pre-IPO roadshow, presented the offer to eight institutions in Sydney and Melbourne.

All in all, the three-part equity raising totalling $66.5 million was done and dusted by July. An instutional pre-IPO offer raised $5 million, the sell-down of former majority shareholder Jan Cameron’s 55 per cent stake raised $36.5 million, and new shares issued in the IPO raised $25 million.

When the company floated on August 5, the stock shot up 30.5 per cent. At Friday’s close the shares were ahead 37.1 per cent at $1.39, valuing the company at $132.1 million.

Hard work for key players

Such a positive start to life as the head of a publicly listed company was the reward at the end of a very busy few months for all the key players. When The Australian Financial Review spoke to McBain on the day of the float, she was leaving a Launceston veterinary clinic after attending to her dog.

“Apparently the dog’s depressed so I’m feeling a bit guilty about not being home enough lately, but the kids are all still perky so I’m feeling pretty happy today," she told us then.

Alongside Roberston and McBain, two other people pivotal to the deal were Bellamy’s chairman Rob Woolley, and James Groom of Hobart’s own Groom Kennedy who handled the legalities. Behind the mysterious Singaporeans at Black Prince and the Packer family – Ellerston Capital, the third-largest shareholder in Bellamy’s is Quality Life – the family company of BRW Rich-lister Bruce Neill. He was one of the early investors in 2009, alongside McBain, Wolley, Cameron and a number of others. Having opted to float her entire stake, Kathmandu founder Cameron missed out on the share price surge that would have netted her more than $14 million. But with legal action looming over the collapse of her discount chain Retail Adventures cashing in early had its advantages. Cameron remains philosophical. “Bellamy’s was a lucky break. I am sure the company will go on to bigger and better things," she said via text message.

McBain was working as a chartered accountant for Launceston firm in 2005 when David Bellamy, who had founded a fledgling organic dairy business the year before, became a client.

In 2007, she joined the business as general manager and soon realised it had serious cashflow issues. Later that year the business was sold to Tasmanian Pure Foods. When the opportunity to invest came along in 2009, McBain tipped in a modest amount. As of Friday, her holding in the company was worth $1.57 million.